Supply Chain Management

Framework of Supplier Code of Conduct

RATCH has enforced the Supplier Code of Conduct as the framework for supply chain management. The first revision was enforced on 31 July 2023, to include the Supply Chain Sustainability practices of the UN Global Compact (UNGC), the United Nations Guiding Principles and Human Rights, and International Labor Organization’s Declaration on Fundamental Principles and Rights at Work. It is a means to ensure suppliers complete their tasks with responsibility and governance practices. In 2025, RATCH reviewed the significant topics of the Supplier Code of Conduct and found all remained comprehensive and in line with international standards.

More Info:

Supplier Code of Conduct

Procurement process

RATCH has established the procurement order as the framework for procurement activities. Suppliers’ environmental, social and governance risks are added into the screening and guidelines and indicators are set in accordance with Supply Chain Sustainability practices to comprehensively cover all material topics in the business context.

More Info:

Environmental and Social Management System (ESMS) Manual

Transparent procurement

After the screening on qualifications and risks, qualified suppliers are enlisted for the procurement process. Under the Company’s regulation of supplies management and the Company’s order on supplies management guidelines, 4 procurement methods are identified and linked with the value and authorization required.

Note: Partial procurement with the objective to change the value and authorization required or the procurement method is prohibited.

The next step for selected suppliers is contract signing. The payment terms and conditions are clearly specified in the purchase agreement and suppliers know when to receive payments from the start. Generally, RATCH make payments within 30 days upon receiving invoices.

In 2025, suppliers were paid within 15.33 days on average from the day invoices were received.

Supplier risk assessment

RATCH has prepared the ESG risk assessment process for all suppliers, to prevent and reduce job abandonment, and non-compliance with the laws relating to labor, safety, and the environment, and reputational risks. The assessment is deployed to identify significant suppliers, taking into account business relevance and ESG issues. The results are a part of the supplier screening. Any supplier with superior prevention of ESG risks and/or ESG performance stands a better chance at winning the selection.

Classification of suppliers in 2025

Risk assessment results

In 2025, RATCH and the power plant under the Company’s financial control conducted the assessment on suppliers’ ESG risks and the results are summarized below:

Monitoring, evaluation and improvement

RATCH has continuously monitored suppliers’ operations and evaluated their post-delivery performance based on quality-related indicators and compliance with various requirements. In case of non-compliance, the Company exercises and follows through the correction and improvement process. If the incident causes severe impacts, the Company may consider additional terms and conditions to the contracts.

RATCH also applies the Together for Sustainability (TfS) initiative’s indicators and the requirements specified in the Supplier Code of Conduct in evaluating suppliers in 5 key aspects: business administration, environmental management, health and safety, labor and human rights and governance. The evaluation is conducted by desk review or on-site audit, depending on the type and risk of each supplier.

The Company plans to include more suppliers in the evaluation process focusing on significant suppliers which play important roles in the operations, to prevent, contain and reduce impacts on the Company. Aside, the Company sees opportunities to enhance supplier capabilities, especially those based in Thailand and local entrepreneurs, as this will help strengthen supply chain resilience and create long-term shared value.

However, if the evaluation shows a supplier does not meet the Company’s requirements, violates laws or possesses acceptable or correctable risks, the Company will at once consider terminating the contract and/or blacklisting the supplier.

Promoting human rights and fair labor in the supply chain

RATCH attaches importance to respecting human rights throughout the supply chain by adhering to the UN Guiding Principles on Business and Human Rights (UNGPs). Human rights are a material topic of the Company as they are directly related to sustainable supply chain management and most incidents involve suppliers and contractors’ activities particularly construction works, maintenance, and outsourcing for project-level activities. The Company stipulates suppliers shall not employ forced labor or child labor and shall refrain from all forms of discrimination. A complaint and whistleblowing channel has been established to which stakeholders and labor in the supply chain can file reports on human rights impacts safely and confidentially.

In 2025, the human rights risk assessment was conducted covering significant suppliers, to identify, prevent, mitigate and monitor human rights impacts across the supply chain in accordance with the UNGP’s guidelines.

Summary of human rights risk assessment of suppliers

The Company Group’s assessment of significant suppliers’ risks showed the low to medium risk level and highlighted labor-intensive construction and maintenance activities for close monitoring and highlighted safety and occupation. In the reporting period, there was no serious human rights violation such as the exploitation of child labor and forced labor or human trafficking. The Company Group has laid out preventive and corrective measures for all identified gaps and monitor the implementation systematically.

Prevention and mitigation

Regarding suppliers with medium to high human rights risks concerning mainly labor and safety, the Company has imposed additional measures to control and deescalate the risks and impacts. The measures include stricter assessment on labor and working environment, an extra clause in contracts concerning labor and human rights, and preparation of the Corrective Action Plan jointly with the suppliers.

Linking to business continuity and organizational resilience

Sustainable supply chain management is a part of business continuity and organizational resilience. To achieve that, the Company takes into account the risks concerning reliance on significant suppliers, disruption in transportation, environmental or social crises, and market volatility. As such, the Company has encouraged multiple sourcing, development of local suppliers and long-term collaboration with potential suppliers in order to support business growth and sustainability.

Collaboration with suppliers

The Company places emphasis on the suppliers involved with the sourcing of raw materials, electricity input factors, and power plant operation and maintenance services, to ensure business continuity and national electricity security. Long-term partnership is vital and can be achieved through collaboration; discussion; regular communications via monthly/scheduled meetings; joint inspection for mutual understanding and trust; joint preparation of crisis management plan and business continuity plan in case of emergency incidents like fuel supply; and joint rehearsal of the plans. This approach will raise confidence and surveillance efficiency for risks and impacts.

Promoting anti-corruption practices to suppliers

RATCH has encouraged 13 suppliers to join the Thai Private Sector Collective Action Against Corruption, in order to strengthen their governance. Invitations have been dispatched to suppliers and they will get the Company’s advice on self-assessment before applying for the membership

Promoting safety with suppliers

The Company is aware that safety and occupational health is crucial and this concern is extended to cover the employees of suppliers/contractors working at the Company’s premises and power plants. Training on safety and occupational health in the workplace is organized for relevant suppliers/contractors on an annual basis, along with the rehearsal of the emergency response plan. This initiative has effectively prevented and reduced work-related risks. In 2025, a number of 751 suppliers attended the training (or 55%).

Internal development of knowledge on sustainable supply chain

The Company has organized training for procurement officers (100%) to reinforce the knowledge on sustainable supply chain management and environmental, social and governance operations as follows:

Target and performance

In 2025, the assessment showed that most of suppliers 1,296 (97.15%) pass the assessment criteria, 36 suppliers (2.70%) failed the assessment criteria mainly involving payment condition and transportation, and 2 suppliers (0.15%) were blacklisted.